How Muslims ended up in Shs19b black hole

On June 25, 2020, Ramathan Mugalu, Uganda Muslim Supreme Council (UMSC)’s secretary general at the time, signed on the dotted line of a deal in which businessman Arthur Kayanja was to inject Shs3.5b into the coffers of the governing body of all Muslims in Uganda. 
The deal, consented to under five months after the Covid-19 pandemic curbs had come in place, entitled Mr Kayanja to the UMSC ranch in Sembabule District that sits on 518 hectares. The ranch was among the properties that UMSC came to own after it was formed in 1972 during the Idi Amin administration. 

Muslims got hold of the asset after the Amin regime kick-started a campaign to lease out vacant land in the cattle corridor in the countryside. The regime envisaged that UMSC would use the land to carry out large-scale livestock farming tailored to export beef and animals to the Middle East. Saudi Arabia, where the yearly Muslim pilgrimage that culminates in the slaughtering of several animals, particularly came into focus.  

When Mugalu appended his signature to a deal that was supposed to see Shs3.5b flow into UMSC’s bank account, Sheikh Shaban Mubajje, the mufti of Uganda, was a witness. Ditto Abdulkadir Idi Balonde, then chairperson of the chief organisation for governing and representing Islam in Uganda—UMSC.

READ: UMSC loses appeal to stop sale of its prime properties over Shs19b debt

Uproar over looming sale of prime Muslim property

No stranger to chaos
Mubajje, who has superintended over the Old Kampala faction for 24 years, is no stranger to Muslim property wangles. In 2006, a group of Muslims that would later form the Kibuli faction, accused him of illegally selling Muslim property in collaboration with former UMSC secretary general Idris Kasenene and then UMSC chairperson Hassan Basajjabalaba. 

Mubajje’s opponents dragged him to court, but much to their disappointment, Margaret Tibulya—then a magistrate at Buganda Road Court—threw out the charges. She ruled that the trio had acted right in their capacity as trustees of UMSC property.

Interestingly, though, Ms Tibulya noted that Mubajje had continuously lied to court under oath that the properties hadn’t been sold.  
“If this country was under Sharia law, Mubajje would have faced the death penalty after the court found him to be lying,” Ibrahim Ssemujju Nganda, Kira Municipality MP, who belongs to the Muslim Tabliq sect, said. 
  
Ms Tibulya, who is now a High Court judge at the Anti-Corruption Division, reasoned that it wasn’t in the court’s jurisdiction to judge the moral values that Mubajje had brought under disrepute. This was the final straw for sheikhs from the Buganda region, namely: Zubair Kayongo, who has since passed on; Nuhu Mazaata Batte, who too passed on; Anasi Kalisa, who is also departed; Sheikh Hussein Rajab Kakooza; Rashid Ssemuddu; Dr Badrudin Ssajjabi; and Muhammad Waiswa.
The aggrieved sheikhs formed a splinter group headquartered in the Kampala suburb of Kibuli with the backing of Prince Kassim Nakibinge.  

‘Love triangle’
Saturday Monitor has established that a day before signing the agreement with Mr Kayanja, UMSC’s top brass signed the same agreement, word for word, with Justus Kyabahwa. Like Mr Kayanja, Mr Kyabahwa was given the same land in Sembabule for a Shs3.5b cash infusion. Under clause 5.2 of the agreement drafted by UMSC lawyers led by Musa Kabega, a refund of the Shs3.5b would be executed if the Muslim leaders failed to transfer the property within 150 days of getting the money. A monthly interest of 12 percent from the date of the execution was thrown in for good measure. 
 
Still, under clause 6.2.1 of the agreement, UMSC introduced another party that had an interest in the land in the name of Enterprise Handling Services Limited or M/S ENHAS. From the documents reviewed, the Muslim leadership committed themselves that within 60 days of getting the money, they would remove a caveat instituted by M/S ENHAS.  

Whilst records show that Kayanja didn’t pay a single cent, bank records show that on June 24, 2020, a transaction worth Shs3.5b from Kyabahwa’s account found its way into the account of UMSC. As money was being exchanged and Kyabahwa waiting for the land, UMSC was battling M/S ENHAS over the same piece of land.  

In a case that was filed in the High Court in Masaka, M/S ENHAS asserted that UMSC, in 2013—through its agents—gave it a lease of about two square miles. To pave the way for facilitation of the 15-year lease, M/S ENHAS doled out Shs50m. A further Shs64m was shelled out to convince UMSC to add five more years to the 15-year lease. M/S ENHAS also disclosed that it invested in various developments on the land, including the construction of valley dams and duly relocated squatters from the land as agreed with the UMSC.  

Another twist
In 2017, there was another twist when UMSC agreed to transfer its proprietary interest in the leased land to M/S ENHAS through a land exchange. In this arrangement, UMSC would get land comprising Kibuga Block 10 Plots 962, 963 & 965 land at Nakulabye, in Kampala, which had a fully developed structure.  
Per court documents reviewed by Saturday Monitor, M/S ENHAS undertook to transfer the Nakulabye land to UMSC after the Muslim leaders purchased the same mortgaged property from NC Bank at Shs900m.  

Immediately upon execution of the land exchange, it is said UMSC was to deliver to M/S ENHAS a duplicate certificate of title for the leased land. This was to be done together with signed transfers, passport photos, and identification documents to facilitate the transfer of the Nakulabye land into UMSC’s name.    All of this showed that UMSC did not have the duplicate certificate of title for the Sembabule ranch. This is because it emerged that the duplicate certificate of title was apparently in the hands of a third party, who had declined to release it. 

With that, UMSC subsequently opted to be paid cash for the purchase of the Sembabule land by M/S ENHAS. In fact, both warring parties agreed to abandon the land exchange deal and resorted to a cash payment.  

The understanding, documents show, was that UMSC would procure the release of the Sembabule duplicate certificate of title from the third party. Subsequently, M/S ENHAS made a partial payment of Shs280m, whereupon UMSC requested for a final document to be prepared.  M/S ENHAS then proceeded to lodge a caveat on the land. While the caveat was registered on August 22, 2019, the organisation would later be shocked when information came through that on July 24, 2020, UMSC had sold the land to Mr Kayanja.  

READ: Uproar over looming sale of prime Muslim property

Court to attach Muslim property over Shs19b debt

Court battle
In her judgment, Justice Victoria Nkwanga Katamba said whereas the failed land exchange transfer agreement was executed in 2017, the evidence on record demonstrated that UMSC continued to receive payments for “the intended agreement of sale” from M/S ENHAS. The judge pointed out that Mr Mugalu, in his capacity as UMSC secretary general, received a cheque payment of Shs280m from M/S ENHAS on January 18, 2018. 
  
“Stanbic Bank, into which the cheque was deposited, acknowledged receipt of it as well as contacting the payee (Mr Mugalu) before cashing it,” Justice Katamba said, adding that Mr Mugalu was well vested with authority under the UMSC Memorandum and Articles of Association to bind the UMSC and he acknowledged having received Shs280m.  
Justice Katamba also said the court is enjoined under Section 14 of the Judicature Act to apply the principles of equity. 

“The cash payments have not only been brought to the attention of this court but have also been duly acknowledged by [Mr Mugalu],” Justice Katamba said, adding, “This is sufficient proof that, but for the afterthought, the [UMSC] intended to part with its interest in the suit land in favour of the [M/S ENHAS].”   
Justice Katamba concluded by ordering M/S ENHAS to pay Shs620m to UMSC as an unpaid balance of the Sembabule land. Once there was proof that M/S ENHAS had paid the balance, the judge ordered UMSC to transfer the Sembabule land into the name of M/S ENHAS. 

Fight to the bitter end  
Unwilling to give up the land, UMSC took the fight to the Court of Appeal, where they finally signed a consent judgment with M/S ENHAS. UMSC recognised that M/S ENHAS was in physical possession of the land. This after the company had paid off all the bonafide occupants and had subsequently fenced the land and put in place a farm.  
In the consent judgment signed by Mugalu and Kabega on behalf of UMSC, it was agreed that the appeal be abandoned and that the Masaka High Court judgment be maintained. 

“[M/S ENHAS] shall within 48 hours from the date of execution of this consent fully comply with the orders of the court by settling the decretal sum and the accumulated interest,” the consent, signed on March 3, 2023, noted, adding that both parties were to terminate all proceedings they had instituted against each other in any fora upon execution of the agreement.  

Bombshell dropped
As the two entities were battling it out, Mr Kyabahwa was patiently waiting in the wings for the land to be transferred into his name. This was after having paid the money. On March 30, 2023, however, Mugalu delivered the unpalatable news. He informed Kyabahwa that in light of the Masaka High Court judgement, that was no longer possible. 

“The purpose of this letter is to notify you that the UMSC is not able to give possession of the land by the agreement, and is not able to complete the fulfilment of the agreement, following the agreement of sale and transfer of the land on June 24, 2020,” Mugalu informed Kyabahwa.
To show that UMSC wasn’t bluffing, they asked Kyabahwa to return the original owner’s copy of the certificate title and transfer documents which had been handed to him after paying the Shs3.5b.  
 
Mugalu, in a one-page letter, told Kyabahwa that UMSC was to refund the Shs3.5b with interest as laid down in the agreement.  
“The council undertakes to refund all your money by the agreement of the sale and transfer of land signed on June 24, 2020, since the council is not able to give possession of the land and complete the agreement,” Mugalu said, adding that they regretted the decision but circumstances were beyond their control. 
On May 11, 2023, UMSC’s lawyer told Kyabahwa that they had never transacted with him. 

“From the information provided by our client, one Arthur Kayanja, is the known person with whom an agreement was executed regarding the above-captioned land, and owing to the prevailing circumstances, our client, on April 27, 2023, instructed us to write to the said  Arthur Kayanja, which we did,” UMSC lawyers of Kabega, Bogezi and Bukenya Advocates wrote to Kyabahwa.  
This compelled Kyabahwa to take the case to the High Court’s Commercial Division, demanding Shs19b when interest is factored in.  

Aluma alleges
In response, Muhammad Ali Aluma, who was now the acting UMSC secretary general after Mugalu had been ousted following a fallout with Mubajje in early 2023, denied that they owned Kyabahwa to the tune of Shs19b, insisting that the 144 percent per annum interest in the agreement which was drafted by the UMSC’s legal team was harsh and unconscionable, warranting the High Court’s intervention. Aluma heaped the failed execution of the sale agreement between UMSC and Kyabahwa on the former.
  
Kayanja, whom Aluma described as a close associate of Kyabahwa, allegedly frustrated the whole process of transferring the land into Kyabahwa’s name. He reportedly did this by violently taking over possession of the land. 
“[UMSC] is up to now been made to believe that the purchaser of the suit land is Arthur Kayanja, the respondent’s close ally and to date, he still claims the suit land,” Aluma said.  

Aluma’s claim would become unsustainable once Kyabahwa filed an affidavit sworn by Kayanja himself. Therein Kayanja admitted that on June 25, 2020, he signed an agreement with UMSC to buy the land in Sembabule. He also hastened to add that he never paid for the land at all.  
As a result of him not paying a single cent, Kayanja said UMSC never handed him the certificate of title.  

“It’s not true as alleged by the applicant that I have or claim any interest in the suit whatsoever. I don’t have any such claims at all,” Kayanja said.   

When the High Court ruled that UMSC pay the entire Shs19b lest they lose a host of properties, including the historical Gaddafi National Mosque, Sheikh Mubajje claimed his signature on the agreement with Kyabahwa had been forged. But, in court filings, Mugalu supported Kyabahwa, saying he—in his capacity as UMSC secretary general—had signed the agreement in the presence of UMSC’s senior officials that included “the eminence, the Mufti of Uganda.” 

Mugalu also confirmed that he was the author of the letter dated March 30, 2023, in which UMSC pledged to refund Kyabahwa’s money with interest. 
“The stamp appearing on the letter is the stamp I used at the time as the secretary general and is identical to the stamp that I imposed on the consent agreement of the sale of the suit land between the applicant and the respondents,” he asserted, adding that “it’s, therefore, not a forged stamp and the claim to that effect by [UMSC] is false.” 

Justice Harriet Grace Magala, in her August 7, 2023, judgement made it clear that UMSC should have paid Kyabahwa the moment they lost in Justice Katamba’s court in Masaka and chose not to appeal.

Not new

Mufti Shaban Mubajje, who has superintended over the Old Kampala faction for 24 years, is no stranger to Muslim property wangles. In 2006, a group of Muslims that would later form the Kibuli faction, accused him of illegally selling Muslim property in collaboration with former UMSC secretary general Idris Kasenene and then UMSC chairperson Hassan Basajjabalaba. 
Mubajje’s opponents dragged him to court, but much to their disappointment, court—threw out the charges.